Markets remains generally steady in early US session. Data showed consumer spending in US was unexpectedly flat in April versus expectation of 0.3% growth. Personal income also rose less than expected by 0.4%. Major currencies are mildly lower against dollar and yen after the release. European stocks pare some of earlier gains. Crude oil also treats from intraday high of 75.72 and is back below 75 level while gold is revolving around 1210. After all, impact is limited.

Other data released today saw Swiss KOF leading indicator rose more than expected to 2.16 in April. Swiss trade surplus rose widened to CHF 2.02B in April. UK Gfk consumer confidence deteriorated to five month low of -18 in May. German import price rose 2.0% mom in April. Japan national core CPI dropped -1.5% yoy in April while Tokyo core CPI dropped -1.6% yoy in May, both suggesting deflation is still a deep problem in Japan. Unemployment rate unexpectedly rose to 5.1% in April. Household spending also dropped -0.7% in April. Though, retail sales is better than expected and rose 4.9% yoy.

Strain in funding conditions eased with London Interbank Offered Rate, or Libor snapped 13 days advance and drop to 5.3625% today. Also, spread between three-month dollar Libor and overnight index swaps, a barometer of market stress, narrowed to 30.6 basis points from 30.9 bps Thursday.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2211; (P) 1.2303 (R1) 1.2452;

EUR/USD edges higher to 1.2451 so far today. Consolidation from 1.2143 is still in progress and stronger rise might be seen towards 1.2671 resistance. But after all, upside is expected to be limited by 38.2% retracement of 1.3691 to 1.2143 at 1.2734 and bring fall resumption.On the downside, decisive break of 1.2143 will confirm down trend resumption and should target 1.2 psychological level next.

In the bigger picture, the break of 1.2329 low confirms that whole down trend from 2008 high 1.6039 has resumed. Such down trend should now target 1.1639 key support level and possibly further to 100% projection of 1.6039 to 1.2329 from 1.5143 at 1.1433. On the upside, break of 1.3266 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish.

Economic Indicators Update

GMT Ccy Events Actual Consensus Previous Revised 23:01 GBP GfK Consumer Confidence Survey May -18 -15 -16 23:30 JPY Tokyo CPI Ex-Fresh Food Y/Y May -1.60% -1.50% -1.90% 23:30 JPY National CPI Ex-Fresh Food Y/Y Apr -1.50% -1.30% -1.20% 23:30 JPY Unemployment Rate Apr 5.10% 5.00% 5.00% 23:30 JPY Household Spending Y/Y Apr -0.70% 2.50% 4.40% 23:50 JPY Retail Trade Y/Y Apr 4.90% 3.60% 4.70% 06:00 EUR German Import Price Index M/M Apr 2.00% 1.40% 1.70% 06:15 CHF Trade Balance (CHF) Apr 2.02B 2.17B 2.01B 1.70B 09:30 CHF KOF Leading Indicator May 2.16 2.03 1.99 12:30 USD Personal Income Apr 0.40% 0.50% 0.30% 0.40% 12:30 USD Personal Spending Apr 0.00% 0.30% 0.60% 12:30 USD PCE Core M/M Apr 0.10% 0.10% 0.10% 12:30 USD PCE Core Y/Y Apr 1.20% 1.20% 1.30% 12:30 USD PCE Deflator Y/Y Apr 2.00% -- 2.00% 13:45 USD Chicago PMI May 62 63.8 13:55 USD U. of Michigan Confidence May F 73.5 73.3